This matter is before the court on creditor Classic Bank's ("the
bank") objection to the trustee's notice of intent to sell two all-terrain vehicles ("ATVs"), a Yamaha 350 Warrior and a Honda 300. A
copy of the bank's proof of claim in this case shows that it was owed
$8,524.03 as of February 24, 2003, and that its claim was secured by
the two subject ATVs. According to the bank, it first loaned money to
the debtors in December 2000, and filed a UCC-1 in regard to the
Yamaha ATV on December 6, 2000. A certificate of title was issued for
the Yamaha ATV on February 1, 2001. The debtors then executed a
promissory note on August 7, 2001 in the amount of $10,500.00. They
also executed a security agreement giving the bank a security interest
in the Yamaha and the Honda ATVs on the same date. A certificate of
title for the Honda ATV was issued on September 27, 2001. The bank's
lien is not noted on either certificate of title. The bank filed a
UCC financing statement covering both the ATVs on March 20, 2002. The
debtors filed their Chapter 7 petition on December 16, 2002.

The bank contends that it has properly perfected security
interests in both ATVs, notwithstanding its failure to note the liens
on the ATVs on their respective certificates of title, because they
are "off-road vehicles" which are exempt from titling and lien
notation requirements set out in various Kentucky statutes. The
registration and title requirements for vehicles are set out in KRS
186A.070, which states in pertinent part: "Except as otherwise
provided, the state resident owner of a vehicle as defined in KRS
186.010(8)(a), . . ., shall within fifteen (15) days apply for and
obtain a certificate of title in his name."

As stated in KRS 186.010(8)(a),

"Vehicle," as used in KRS 186.020 to 186.260,
includes all agencies for the transportation of
persons or property over or upon the public
highways of this Commonwealth and all vehicles
passing over or upon said highways, excepting
road rollers, road graders, farm tractors,
vehicles on which power shovels are mounted, such
other construction equipment customarily used
only on the site of construction and which is not
practical for the transportation of persons or
property upon the highway, such vehicles as
travel exclusively upon rails, and such vehicles
as are propelled by electric power obtained from
overhead wires while being operated within any
municipality or where said vehicles do not travel
more than five (5) miles beyond the city limit of
any municipality.

Vehicles which are exempt from title and registration requirements are
set out in KRS 186A.080:

(1) A vehicle owned by the United States unless
it is registered in this state;

(2) A vehicle owned by a nonresident of this
state, principally operated in another
state, properly and currently registered
and titled in another state;

(3) A vehicle regularly engaged in the
interstate transportation of persons or
property for which a currently effective
lawful certificate of title has been issued
in another state;

(4) A vehicle moved solely by animal power;

(5) An implement of husbandry;

(6) Special mobile equipment;

(7) A self-propelled wheelchair or invalid
tricycle;

(8) A pole trailer;

(9) A motor vehicle engaged in the
transportation of passengers for hire
operating under a currently valid
certificate of convenience and necessity;
and

(10) A moped.

The bank contends that certain restrictions on the operation of
ATVs on public highways set out in KRS 189.515 operate to except ATVs
from the definition of "vehicle," and also bring them within the
purview of the exemption statute. KRS 189.515 provides in pertinent
part:

(1) Except for vehicles authorized to operate on
a public highway as of July 15, 1998, and except
as provided in subsection (6) of this section, a
person shall not operate an all-terrain vehicle
upon any public highway or roadway or upon any
right-of-way of any public highway or roadway.

. . . .

(6)(a) A person may operate an all-terrain
vehicle on any two (2) lane public highway in
order to cross the highway. In crossing the
highway under this paragraph, the operator shall
cross the highway at as close to a ninety (90)
degree angle as is practical and safe, and shall
not travel on the highway more than two-tenths
(2/10) of a mile.

(b) A person may operate an all-terrain
vehicle on any two (2) lane public highway, if
the operator is engaged in farm or agricultural
related activities, construction, road
maintenance, or snow removal.

The bank concludes that KRS 189.515(6)(a) and (b) makes ATVs
comparable to "road rollers, road graders, farm tractors, vehicles on
which power shovels are mounted" and the like so as to except them
from the definition of "vehicle" in KRS 186.010(8)(a), and make them
exempt under KRS 186A.080. This court agrees.

In an analogous case, the Court of Appeals of Kentucky ruled in
Manies v. Croan, 977 S.W.2d 22 (1998), that the failure to include
ATVs on the list of vehicles excepted from the definition of "motor
vehicle" does not make an ATV a "motor vehicle" for purposes of the
Motor Vehicle Reparations Act (KRS 304.39-101 - 304.39-350). The
definition of "motor vehicle" in KRS 304.39-020(7) is similar to the
definition of "vehicle" in KRS 186.010(8)(a) in that the list of
equipment excepted is essentially the same.

The Manies court, in addressing the plaintiff's argument that
ATVs were motor vehicles, stated:

Manies argues that this list of exceptions
implies a legislative intent to include within
the definition all those types of motor vehicle,
such as ATVs, not expressly excluded. We
disagree.

We construe statutes within their context and
strive to give consistent meaning to related
statutory provisions. . . . The definition of
"motor vehicle" relied upon by Manies cannot be
construed without consideration of the remainder
of the MVRA. That act focuses upon automobiles
and seeks to mitigate to some extent the high
cost of automobile accidents on our society.

Id., at 23. The context in which this court is considering the nature
of an ATV is similar in that the titling and lien notation
requirements relied upon by the trustee are part of a statute directed
to vehicles which travel over the highways of the Commonwealth. As
set out above, an ATV is not such a vehicle, and the fact that
certificates of title were issued for both the ATVs is not dispositive
in this instance.

The trustee therefore may not sell the ATVs pursuant to his
notice of sale unless it appears that the sale price exceeds the
amount of the indebtedness secured by the perfected lien in favor of
Classic Bank. An order in conformity with this opinion will be
entered separately.